A bill that would legalize and regulate daily fantasy sports (DFS) in the state of Colorado has passed through both chambers of the state legislature and is now on to the desk of Governor John Hickenlooper for final approval. The bill, HB 16-1404, was introduced in the House of Representatives on March 24th and made it all the way through both the House and Senate, with amendments, in only about a month and a half, receiving the final go-ahead yesterday, May 9th. The Senate passed the bill last Friday by a 26-7 vote, while the House approved the Senate’s amendments and passed the bill, 45-19. The Governor has 30 days to sign or veto the bill; if he does nothing, it automatically becomes law.
The bill is fairly typical of other DFS bills we have seen around the country. Players must be at least 18-years old, amateur sports are off-limits, and operators must have consumer protections in place such as segregated player funds, self-restriction capabilities, and data that could affect the integrity of contests must be kept secure.
The Colorado bill also tries to protect novice and casual players from being picked on too much by the pros. In larger contests, meaning those with at least 101 entries, no single player will be permitted to have more than three percent of the total entries or 150 entries, whichever number is lower. Additionally, there must be an easy way for players to tell who the “highly experienced” players are, though the definition of a “highly experienced” player was not given. This is particularly important in heads-up matches, where a new players could unsuspectingly stumble into a contest against a top pro.
Some people who are against this sort of labeling of veteran players argue that in online poker, you don’t necessarily know who is who at the tables. DFS is different than poker, though. Beginners usually start at micro-to-low stakes, the types of games that the pros don’t frequent. Certainly, there are recreational players who immediately jump into high stakes games, but they don’t make up a significant portion of the player pool and again, since the best players usually stick to higher stakes games, even casual players who settle at those stakes know what they are getting themselves into. In DFS, many pros do, in fact, play in low-stakes contests because they know that’s where the lesser-skilled players are and when they can participate in dozens or even hundreds of contests at once, they make up for the little that they can win in each game with volume.
One noticeable difference between the Colorado bill and bills from other states is that there is a differentiation made between a “small fantasy contest operator” and other operators. Small operators are defined as sites with no more than 7,500 players with active accounts. Small operators will not be required to be licensed, only registered with the state, and will not be subject to an annual audit. The reason for the distinction is likely to encourage smaller operators to enter to the Colorado market, as the cost of entry will be lower; audits cost money and the elimination of an official license probably means no added fees beyond the tax on revenue.
